Saturday, March 24, 2012

"Happy 20th anniversary Smart Money magazine. In honor of it, Sarah Morgan of Dow Jones writes about the top twenty stocks for those 20 years. I will discuss the best, #1 and #2"

Dow Jones Industrial Average 13,232.62 (Up) Week ending 03-16-2012.
Dow Jones Industrial Average 13,081 (down) Week ending 03-23-2012.

The folks that do the fine work that is Smart Money Magazine celebrated their 20th Anniversary last week. They are a continuing source of reliable financial information and we thank them. Sarah Morgan there decided to put together the stats to see what stocks had performed the best as far as appreciation over the last 20 years and I decided to tell you about Number 1 & Number 2 that still both have good fundamentals.                                                                                                 
KANSAS CITY SOUTHERN (Symbol KSU, $70.45)  turned out to be the number one performing stock over the last 20 years. It has gone up an astounding 19,090%. They used to be a conglomerate but spun off the Janus Capital Group and are now just the railroad. What makes them special? Not only do they have the very desirable West-East railroad routes but they also crisscross with North-South routes going from Canada to Mexico

KSU continues to roll out the earnings with $3.48 per share projected for 2012 and $4.12 per share for 2013. Long term earnings are projected at 17.7%.   The one year total return has been 29.4% and the 3 year total return motored at 454.3%.  This train just keeps rolling down the track. Also if they don't build all these pipelines their tanker cars will be filled with crude oil and liquefied natural gas to get the stuff to the refinery locations. This one still looks good to me after 20 years of growth. 

So who was number #2? That would be  Middleby Corp. (Symbol MIDD,$99.72) . Who the heck is that and what business are they in? Sounds like an episode from the old show the Twilight Zone. (next stop Willoughby!) Well when you go on Friday night and pick up a pizza it was probably baked in one of their commercial ovens.  

Middleby had a leisurely Total return since April 1992 of 14,330%. You didn't know you had eatin that much pizza! Middleby "makes ovens and other equipments for restaurants, but "it's probably more of a technology company than an industrial or equipment company," says Anton Brenner, an equity analyst with Roth Capital Partners, LLC. "It's the most innovative company in the industry," Brenner says. They regularly add new labor-saving features to their equipment, he says. They've also grown through M&A: The stock really took off after Middleby merged with Blodgett, a division of Maytag that also made commercial cooking equipment."  (from Sarah's article). 

 MIDD is projecting earning per share for 2012 of $5.81 . 2013 is shaping up as projecting at $6.62 per share. 5 year sales growth has been 14.84% and the Long Term projected earnings growth is 22%. (all these stats are from SmartMoney of course). The company runs at a Buffett like 20.30% Return on Equity. The Total 3 year return has been a meager 207.5%  , enough to boost up your kid's college fund.

My brother Howard says my little articles with the logos reminds him of the AMC show "Madmen" produced by Lionsgate Entertainment (symbol LGF, $14.50) (and no slouch itself, just produced "the Hunger Games" !) . Well I hope it entertains and informs you at the same time. 

Do not be afraid to ask questions via the comment portion of this site to share ideas on these subjects.

Have a pleasant Spring day if you are in the Northern hemisphere. If you are in the Southern Hemisphere 12 more weeks of Winter.


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